Developing data-driven learning journeys for micro- and small entrepreneurs in Brazil

The following guest post is by Flourish Fi, an organization whose mission is to empower all people to build positive money habits and achieve financial security.

Digital technology revolutionizes the way we interact with money and conduct business transactions. However, this transformation has not always extended to micro- and small enterprises (MSEs) in emerging markets. In partnership with Mastercard Strive, we had a chance to understand and evolve our solution for small entrepreneurs to drive positive money habits.

At Flourish Fi, we use behavioral science, gamification, and artificial intelligence to drive behavior change. Our technology engages users in a rewarding financial journey, increasing loyalty to the financial institution while reinforcing good financial habits for the end user. Our solution for consumer banking is already being used in the United States, Brazil, Mexico, Colombia, and Costa Rica. Now our solution targeting MSEs is live with financial institution partners in Brazil.

Gamifying the financial education journey

The future of financial services is personalized and data-driven. This necessitates an understanding of the client’s profile and the use of insights and artificial intelligence to customize journeys. Our goal for the work executed under the Strive Innovation Fund was to adapt our technology specifically for MSEs. We planned to create a financial journey that would support them in building their financial knowledge and empower them with better financial management. To achieve this, we planned to partner with financial institutions in Brazil that catered to MSEs and shared our goal of leaving a positive impact for users.

During this work, we gathered insights from the research and execution of a pilot that has informed our understanding of the entrepreneurs, the financial institutions that serve them, and the process of partnering with those financial institutions. Read more in our previous blog post.

Putting the end user first

During the first phase of our project, we took a deep dive into understanding the business and financial needs of MSEs. Our research led us to understand different personas (read more about this process in our last blog post) and key points to ensure the end-user experience of our solution was successful.

Along with understanding what product considerations would be important to small businesses — such as a quick onboarding experience and the importance of guiding small businesses to understand the positive financial behaviors that were important to adopt — we also identified the areas that MSEs are struggling with the most in their business:

• Financial management: For many MSEs, the lines between personal and business finances tend to blur. Their day-to-day priorities revolve around keeping up with bills, making sales, and managing the administrative tasks of running a business. This often leads to a lack of separation between personal and business accounts. We also identified that many MSEs don’t understand important financial concepts such as cash flow management, working capital, and banking fees.
• Business management: Another common challenge faced by MSEs is a lack of self-confidence when it comes to business management. They are good at their “job” creating what they sell or offering their services. But they don’t truly understand how things work when it comes to business management and finances.
• Digital marketing: Although the digital world is still quite mysterious for many MSEs, they realize the importance of establishing an online presence and leveraging digital marketing. Brand design and visual identity are some of the common challenges, as well as managing social media alongside business responsibilities.

The information we gathered at this stage informed the direction for our product and partnership. We saw the importance of building an engaging journey through content and missions that were relevant to MSEs’ needs, that would create minimal friction for them, and that felt rewarding in a relevant way.

Bringing value through innovation and partnerships

Alongside adapting our solution for MSEs, we knew that to be successful on our journey and make our technology available, it was important to find the right partners early on in the project. As we researched the financial ecosystem in Brazil, we narrowed the scope of financial institutions we would need as partners on this journey.

We found that across the landscape, institutions specializing in MSEs experienced similar pain points to those of our partners that focus on end users: difficulty in increasing client engagement, a desire to increase deposits and card utilization, and a need to increase adoption of their products. Bringing together what we understood of the needs of the end user and the potential partner ecosystem, we decided to focus on recruiting partners who were fintechs that provided credit products or financial tools to small businesses.

This is how we were able to secure a partnership with Justa, a Brazilian fintech founded in 2018 to make the market fairer for businesses across the country. In Brazil, most entrepreneurs still use complicated, bureaucratic, and high-fee solutions. Justa’s solutions are developed with proprietary technology, focusing on business management, transparency, security, and financial education making the day-to-day sales operations of businesses more efficient.

Drawing on lessons learned

We partnered with a fintech that focuses on providing payment and other financial solutions for MSEs. With the pilot launch of our financial knowledge feature — Quiz Justo — we were able to provide gamified financial knowledge to all of the MSE users on their platform. This has helped us to support our partner in their transformation from a more transactional relationship with their customers to a more holistic client engagement approach. This process came with a few challenges and many learnings.

Be more flexible in running pilots with partners

We understand that our partners vary in size and capacity, and we strive to minimize the effort required of them to ensure efficient collaborations. One of our main learnings during this project was to be more flexible during the pilots. We learned that it was better to approach the partnership in smaller pilot phases, allowing for simpler definitions and scope initially and leaving space to make adjustments as new learning came through our tests. We also learned how to better align partner expectations and resources needed and to adjust accordingly should constraints or delays arise during the pilot period. We believe this will make the experience smoother and clearer for all, ultimately leading to a better product for MSEs.

Align desired end-user behaviors with business needs

This pilot also afforded us an opportunity to try different onboarding approaches and messaging that could appeal to and motivate small business customers. However, with adoption numbers not as high as we had initially hoped for, we found that even more friction needed to be removed from the onboarding process. For example, in an attempt to explain to the user the purpose of the product and the rewards system during the onboarding, many users fell off before reaching the actual quiz. Although the registration process was simple, there were still several pages of information that brought friction to the onboarding process.

We also found that the desired action for the end user must be better aligned with their initial purpose for entering the platform. Most end users did not change the journey that they take within Justa’s platform, continuing to come in and go directly to the financial action that they needed to complete. By being entirely disconnected from these actions, it was difficult to bring their attention to the “quiz.” We are excited for the next phase of this project, where we’ll better align our solution with the business needs of MSEs by motivating them to adopt behaviors directly related to their business’s financial management.

We are already applying this lesson in other partnerships with financial institutions serving MSEs in Brazil. For example, future pilots will include gamified solutions that are directly related to MSEs’ business financials. We will be focused on supporting on-time loan payments and the adoption of a business notebook product that will help MSEs track their sales digitally.

Align rewards with small business interests and transactions

Our project helped us better understand that rewards systems should be better connected to the interests and transactions of MSEs. In our early research, we heard directly from small businesses regarding the importance of this connection to make incentives effective. During our pilot, the connection to the reward system was not quite clear to users, so we will improve this connection in the next phase of this and future projects.

Looking ahead: Our unwavering mission

During our project with Mastercard Strive, we had the chance to research and test an innovative solution for financial institutions to offer to their MSEs. We adapted Flourish’s technology, creating a unique customer journey to reduce friction and making it easier for small businesses to adopt good money habits. We are now ready to expand our reach and impact to even more entrepreneurs in Brazil. Over the next few months, we are planning to go live with solutions with two more financial institutions in Brazil.

We continue to work towards empowering all of our end users to build positive financial habits and attain financial security, all the while making the process enjoyable. Our team is wholeheartedly dedicated to crafting responsible, engaging, and rewarding financial products and helping our financial institution partners deliver these rewarding experiences to their loyal customers.